- Boost for Australian Dollar
- Trouble ahead for European politics?
- German production data watched closely today
By Charlie Horsley
Boost for Australian Dollar
The Australian Dollar is showing some strength after a fairly neutral tone from the RBA overnight. RBA minutes showed that policymakers are maintaining the cautiously neutral stance. The low interest rate is helping to bring down the unemployment rate and keep inflation inside its target band. It's generally expected that the Reserve Bank of Australia (RBA) will be on hold throughout 2018. But views on whether it will hike interest rates in early 2019 are divided.
Progress for German government
In Germany, over 450,000 members of the Social Democratic party will start voting on reforming the grand coalition with Chancellor Angela Merkel's Christian Democratic Union. They will have until 2nd
March to submit their votes. So, it looks like progress is finally being made in forming a German government.
Trouble ahead for European politics?
Europe’s populist outbreak is set for a key test on 4th March, as voters in Italy go to the polls to choose a new government. Anti-establishment parties have enjoyed a surge in recent years, from Marine Le Pen’s Front National in France to the anti-migrant Alternative for Germany. Italy — where populist parties have traditionally done well — has Beppe Grillo’s Five Star Movement and the Northern League. How they perform will have a major bearing on Italy and the wider EU movement. This, in turn, could have repercussions for the Euro and the wider economy.
German production data watched closely today
The ZEW German Producer Price Index (PPI), always an important economic indicator for Germany and the Eurozone, will be the main focus during European currency trading. The Eurozone will also release consumer confidence data and Switzerland will release their trade balance figures.
More key economic insight to be released in the UK
Meanwhile, the UK releases the Confederation of British Industry (CBI) Trends Total Orders today, which is another good barometer for the economic health of the UK and an overview of business conditions across Britain. Manufacturers will be hoping for more good news as UK industry continues to grow, despite cost and political pressures and the ongoing uncertainty of Brexit. The Pound seems to be holding steady for now.
Canadian Dollar awaits important wholesale data
Across the Pond, Canada’s wholesale sales data will be considered by markets this afternoon, again, another important insight of the state of the Canadian economy, which could affect Canadian Dollar strength.